So far this week has played out in favor of the long side. Miss Market is always a bit coy, so its not a convincing argument that we have withstood last week's down draft, but she is hinting that we have.
The big thing to note on the momentum charts is that the Fast Momentum has bottomed and taken a turn to the long side. That comes after two positive, although not overwhelming days. The good thing to note about today's action is how the market attempt to break down, particularly among the financials, but then staged a nice move to the upside late in the day. That tells me that we have seen the last of the mini-correction. We don't trade on hunches alone, so we want some evidence to support that in the form of our Moderate Momentum indicator hitting bottom and moving to the long side in concert with the Fast Momentum. Let's see if that happens in the next day or two.
We have also seen a bit of slippage in the recent rally by the precious metals, Euro and Bonds. They never got back to a strong TradeWinds position. Keep an eye on that group as we watch to see if they are just regrouping for another long run, or if was a short side correction.
We the slow momentum still strongly in the positive TradeWinds zone, I like our odds of reasserting the move to the long side in the next couple of days.
Now check out our Top 25 Lists and TradeWinds Black Box.
Wednesday, May 28, 2008
Monday, May 26, 2008
TradeWinds for May 23rd
Friday ended up being one of those days that really confounds me. Its was a down day, going against what I had predicted for the week, so of course I didn't like it. The problem that it gives me is that it did not break the back of the uptrend but rather left it in limbo for another day of trading. All the action was in the first hour and the last hour of the day, while in between it was a tug-o-war between the bulls and the bears. The bears won, but not convincingly.
Our slow or long term momentum is still well within positive TradeWind territory, that's good. But on the bad side, we see it slowly turning down and one major index, DIA, has fallen into the neutral zone. Back on the good side, the Q's held up nicely through out the day ending with only a small loss. Of our 40 sectors and indexes that we track, 25 are still in the positive TradeWind zone, 11 are neutral and 4 are negative. That's good, but on the bad side, the number of neutrals in growing. So all in all its a mixed bag.
We can definitely say that the market is oversold and our fast momentum indicator is reaching to an extreme oversold level, while the moderate momentum indicator is not far behind. Barring some market jarring news, its a safe bet there will be a bounce early in the week. If we are breaking down the uptrend, we should see more big down days by the end of the week. If its a positive week, then then the uptrend can be said to be holding. Hold on to your hats.
Now check out our TradeWinds Top 25 lists and the results of the first 13 weeks of our TradeWinds Black Box.
Our slow or long term momentum is still well within positive TradeWind territory, that's good. But on the bad side, we see it slowly turning down and one major index, DIA, has fallen into the neutral zone. Back on the good side, the Q's held up nicely through out the day ending with only a small loss. Of our 40 sectors and indexes that we track, 25 are still in the positive TradeWind zone, 11 are neutral and 4 are negative. That's good, but on the bad side, the number of neutrals in growing. So all in all its a mixed bag.
We can definitely say that the market is oversold and our fast momentum indicator is reaching to an extreme oversold level, while the moderate momentum indicator is not far behind. Barring some market jarring news, its a safe bet there will be a bounce early in the week. If we are breaking down the uptrend, we should see more big down days by the end of the week. If its a positive week, then then the uptrend can be said to be holding. Hold on to your hats.
Now check out our TradeWinds Top 25 lists and the results of the first 13 weeks of our TradeWinds Black Box.
Wednesday, May 21, 2008
TradeWinds for May 21st
I am back with a TradeWinds update. I have not been posting as regularly because it is taking a lot of my time. I don't mind doing that because I am doing it mostly for my own benefit. I would like to get more feedback from the readers out there - I know there are few - of what you like or would like to hear more of. Please drop a note - a little positive feedback can go a long way to motivate my posting.
Now I know you have to like some of my recent calls on the market, as we have been spot on the past couple of weeks. Here is what I said on my weekend update, " I kinda of think we will see some more upside early in the week and then some weakness. For you traders, that means look to be taking profits on any open positions and then look for buying opportunities late in the week." Well, after seeing a nice rally on Monday morning, Miss Market has been heading down, down, down. Of course, only half my prediction for the week has come true, we now need to see if there will be buying opportunities in the last couple days of the week.
I have said once before that all trends, long or short, break down at some point when you think they are just testing a support point or working off an over bought/sold condition. Some people call this an inflection point where Miss Market has to make up her mind where to date McLong or McShort. We are certainly at the inflection point and tomorrow will be critical to see who she takes to end of spring dance. Lets look at our indicators.
We still have nice solid TradeWinds momentum on our slow indicator. That means there is still bullish underpinning to the market. The moderate momentum is just starting breakdown and the fast momentum is just about at the oversold point. All of this says we are just working off some bullish excess and all will be fine soon for the longs. If you read back over several of my last posts I have been worrying about the moderate momentum not breaking down and recharging, I think this dip - as sharp as it is, is the price to pay for that. That is healthy and I think we should hold about right where we are at, base a bit and then move up.
I also want to note the curiosity of how the market broke down today. Most of the day we were having a nice consolidation day moving up, then moving down. Then "the news" came in the form of the Fed minutes and all the headlines were about inflation and the fear that the Fed is not going to cut interest rates anymore. Crash goes the market. Now, with food prices rising daily at the grocery store and oil at $132, does anyone in the right mind not know that inflation is a bit of a worry? And with interest being slashed over the last few months, does anyone in their right mind think the Fed is going to cut more? So the Fed says what everyone already knows and the air goes out of the market. I have seen this event happen so many times where the pundits tie the market move to some single event or speech, when in fact the market was technically primed to move in the direction it did. The big money houses didn't just realize that inflation is a problem or interest aren't going down more. Its part of the silly game that is played everyday.
So what to do? Well, I say be cautious until we see that this sell off is indeed done. I have been right often, but I will be wrong as well, so don't take my word for it. Trust, but verify. I actually got suckered a bit myself on the Monday afternoon dip. I thought it was too sudden and deep to be real, so I took some long position expecting to dump them for a quick profits when the expected down turn came. See, I am not perfect.
Now check out our Top 25 lists and TradeWinds Black Box results.
Now I know you have to like some of my recent calls on the market, as we have been spot on the past couple of weeks. Here is what I said on my weekend update, " I kinda of think we will see some more upside early in the week and then some weakness. For you traders, that means look to be taking profits on any open positions and then look for buying opportunities late in the week." Well, after seeing a nice rally on Monday morning, Miss Market has been heading down, down, down. Of course, only half my prediction for the week has come true, we now need to see if there will be buying opportunities in the last couple days of the week.
I have said once before that all trends, long or short, break down at some point when you think they are just testing a support point or working off an over bought/sold condition. Some people call this an inflection point where Miss Market has to make up her mind where to date McLong or McShort. We are certainly at the inflection point and tomorrow will be critical to see who she takes to end of spring dance. Lets look at our indicators.
We still have nice solid TradeWinds momentum on our slow indicator. That means there is still bullish underpinning to the market. The moderate momentum is just starting breakdown and the fast momentum is just about at the oversold point. All of this says we are just working off some bullish excess and all will be fine soon for the longs. If you read back over several of my last posts I have been worrying about the moderate momentum not breaking down and recharging, I think this dip - as sharp as it is, is the price to pay for that. That is healthy and I think we should hold about right where we are at, base a bit and then move up.
I also want to note the curiosity of how the market broke down today. Most of the day we were having a nice consolidation day moving up, then moving down. Then "the news" came in the form of the Fed minutes and all the headlines were about inflation and the fear that the Fed is not going to cut interest rates anymore. Crash goes the market. Now, with food prices rising daily at the grocery store and oil at $132, does anyone in the right mind not know that inflation is a bit of a worry? And with interest being slashed over the last few months, does anyone in their right mind think the Fed is going to cut more? So the Fed says what everyone already knows and the air goes out of the market. I have seen this event happen so many times where the pundits tie the market move to some single event or speech, when in fact the market was technically primed to move in the direction it did. The big money houses didn't just realize that inflation is a problem or interest aren't going down more. Its part of the silly game that is played everyday.
So what to do? Well, I say be cautious until we see that this sell off is indeed done. I have been right often, but I will be wrong as well, so don't take my word for it. Trust, but verify. I actually got suckered a bit myself on the Monday afternoon dip. I thought it was too sudden and deep to be real, so I took some long position expecting to dump them for a quick profits when the expected down turn came. See, I am not perfect.
Now check out our Top 25 lists and TradeWinds Black Box results.
Sunday, May 18, 2008
TradeWinds for May 16th
The past week pretty much unfold the way that we had expected it to. It got a little shakey coming down the stretch, but the strength was generally to the long side through out the week.
Looking to the week ahead, its actually kinda of a tough call. The underlying momentum as depicted in out Slow Momentum indicator is still very much in the positive TradeWinds territory. So it is a buy the dips market. The Moderate and Fast momentum indicators, while moving strongly to the upside tell me they will reach a point sometime this week where they need to take another refueling stop. I kinda of think we will see some more upside early in the week and then some weakness. For you traders, that means look to be taking profits on any open positions and then look for buying opportunities late in the week.
By the way, its fun to read all the headlines about how the market is moving against this or that news, or people finally getting on board that this is a market to be playing to the upside. We have know that for many weeks now. And I can assure you that you will hear first when the market is ready to give up its long ways.
From a sector perspective its still a broadbased long side move. Of the forty that we track on 10 are neutral or negative. We are watching with interest the recent movement in the precious metals. They are still in negative TradeWinds zone, but they are rising. We will keep you informed if it looks like its time to play them again to the long side. Right now I am thinking its a false move, given the improving strength of the dollar.
Now check out our Top 25 lists and our TradeWinds Black Box results for last week.
Looking to the week ahead, its actually kinda of a tough call. The underlying momentum as depicted in out Slow Momentum indicator is still very much in the positive TradeWinds territory. So it is a buy the dips market. The Moderate and Fast momentum indicators, while moving strongly to the upside tell me they will reach a point sometime this week where they need to take another refueling stop. I kinda of think we will see some more upside early in the week and then some weakness. For you traders, that means look to be taking profits on any open positions and then look for buying opportunities late in the week.
By the way, its fun to read all the headlines about how the market is moving against this or that news, or people finally getting on board that this is a market to be playing to the upside. We have know that for many weeks now. And I can assure you that you will hear first when the market is ready to give up its long ways.
From a sector perspective its still a broadbased long side move. Of the forty that we track on 10 are neutral or negative. We are watching with interest the recent movement in the precious metals. They are still in negative TradeWinds zone, but they are rising. We will keep you informed if it looks like its time to play them again to the long side. Right now I am thinking its a false move, given the improving strength of the dollar.
Now check out our Top 25 lists and our TradeWinds Black Box results for last week.
Wednesday, May 14, 2008
Tradewinds for May 14th
First off, apologies for the lack of posting recently. Its just been busy. Even if I am not posting, I do update the daily momentum graphs and our Top 25 lists, so please check in to see those.
This week has unfolded pretty much as week predicted last week. We saw the bounce coming and the market has delivered. We cautioned to watch for a head fake, and there wasn't one - or was there?
I last saw the market about 2:40 this afternoon. The Dow was up about 150 and the whole market was cruising. All my plays were approaching their profit points, I was thinking of the new car. After my dental appointment, I check how things ended up and saw a complete collapse in the final hour. I hate that - the market collapse and my dental appointment. I our momentum graphs are still in great shape, but there needs to be caution over the next two days as we head into options expiration on Friday. I for one, will lower my profit points unless we see a strong start to trading tomorrow.
Now overall we are still in great shape. Our slow momentum indicators is just cruising in the positive TradeWinds and moderate and fast momentum are rocketing off lows. This should mean a higher market move, but then .....
Check out our Top 25 lists and this week's TradeWinds Black Box results here.
This week has unfolded pretty much as week predicted last week. We saw the bounce coming and the market has delivered. We cautioned to watch for a head fake, and there wasn't one - or was there?
I last saw the market about 2:40 this afternoon. The Dow was up about 150 and the whole market was cruising. All my plays were approaching their profit points, I was thinking of the new car. After my dental appointment, I check how things ended up and saw a complete collapse in the final hour. I hate that - the market collapse and my dental appointment. I our momentum graphs are still in great shape, but there needs to be caution over the next two days as we head into options expiration on Friday. I for one, will lower my profit points unless we see a strong start to trading tomorrow.
Now overall we are still in great shape. Our slow momentum indicators is just cruising in the positive TradeWinds and moderate and fast momentum are rocketing off lows. This should mean a higher market move, but then .....
Check out our Top 25 lists and this week's TradeWinds Black Box results here.
Sunday, May 11, 2008
TradeWinds for May 8th
Last week unfolded pretty much the way we thought it would and the way we wanted to see.
We said for some time that our Moderate Momentum indicator was stubbornly overbought and needed to unwind a bit. That has been accomplished as our Fast Momentum indicator has moved to an over sold level while bringing the moderate down, and most importantly, leaving our slow or long term indicator firmly in the positive TradeWinds zone. This sets us up for a bounce sometime in the next few days.
Of course, a bounce to the long side is not a sure thing. Remember every trend ends with a break down of the pattern of the trend. So we are at the point where the long continues by a bounce or breaks down. Be sure the bounce is in place before placing the big bets. And keep an eye out for Mr. Head Fake. He can get you by a fake to the long side and then a breakdown, or a fake to down side followed by a strong rally. You never know, which is what makes this game so fun and maddening. I think the odds are in the favor of a long side move based upon the strength of slow momentum indicator, broadbased movement of sectors and growing oversold condition of the market.
Last week was interesting for our TradeWinds Black Box. Check out the results along with our Top 25 lists.
We said for some time that our Moderate Momentum indicator was stubbornly overbought and needed to unwind a bit. That has been accomplished as our Fast Momentum indicator has moved to an over sold level while bringing the moderate down, and most importantly, leaving our slow or long term indicator firmly in the positive TradeWinds zone. This sets us up for a bounce sometime in the next few days.
Of course, a bounce to the long side is not a sure thing. Remember every trend ends with a break down of the pattern of the trend. So we are at the point where the long continues by a bounce or breaks down. Be sure the bounce is in place before placing the big bets. And keep an eye out for Mr. Head Fake. He can get you by a fake to the long side and then a breakdown, or a fake to down side followed by a strong rally. You never know, which is what makes this game so fun and maddening. I think the odds are in the favor of a long side move based upon the strength of slow momentum indicator, broadbased movement of sectors and growing oversold condition of the market.
Last week was interesting for our TradeWinds Black Box. Check out the results along with our Top 25 lists.
Thursday, May 8, 2008
TradeWinds for May 7th
Its been a busy week away from the blog, so I only have time for a quick post on Wednesday's action. I you have been following our posts lately, you know we were expecting a down turn. I didn't expect as big as of hit that we got, but that is Miss Market for you - ever unpredictable.
This is a healthy downturn as I have also been documenting. Our moderate momentum indicator needed to bleed off some over bought status, which it has begun to do. The next big move will come when the slow and moderate momentum turn up roughly in tandem. That will probably be next week, but then again, I don't make predictions.....
This is a healthy downturn as I have also been documenting. Our moderate momentum indicator needed to bleed off some over bought status, which it has begun to do. The next big move will come when the slow and moderate momentum turn up roughly in tandem. That will probably be next week, but then again, I don't make predictions.....
Tuesday, May 6, 2008
TradeWinds for May 6th
After a day off on Monday, I am back. Our general story remains pretty much the same. The overall market is in a strong uptrend, in the short term we may see some weakness.
Monday was a down day as we suspected, Tuesday was moderately strong. What that meant for our momentum indicators is that the slow momentum remained in nice positive TradeWinds territory, our moderate momentum dipped slightly, which we were happy to see; the fast momentum is jumping again which means it may need another recharge soon.
Here is how I think the next few days play out. Tomorrow should see some follow through to today's action, but there will be resistance to it being a run away day. By Thursday more weakness will enter the market which will bring the moderate and fast momentum indicators down in tandem. This is good because when they regain their footing and move back up it should be a strong move. Of course don't take my word for it, watch the market closely to see if this scenario begins to unfold.
We have seen some positive action in the precious metals in the last few days. If you have the gold itch, I suggest you wait a bit long to see if this move is the beginning of a new bull move for all that glitters, or just a shiny dead cat bouncing. The slow momentum numbers are very unfavorable for gold and silver so be careful.
Now check out our Top 25 Lists and TradeWinds Black Box results.
Monday was a down day as we suspected, Tuesday was moderately strong. What that meant for our momentum indicators is that the slow momentum remained in nice positive TradeWinds territory, our moderate momentum dipped slightly, which we were happy to see; the fast momentum is jumping again which means it may need another recharge soon.
Here is how I think the next few days play out. Tomorrow should see some follow through to today's action, but there will be resistance to it being a run away day. By Thursday more weakness will enter the market which will bring the moderate and fast momentum indicators down in tandem. This is good because when they regain their footing and move back up it should be a strong move. Of course don't take my word for it, watch the market closely to see if this scenario begins to unfold.
We have seen some positive action in the precious metals in the last few days. If you have the gold itch, I suggest you wait a bit long to see if this move is the beginning of a new bull move for all that glitters, or just a shiny dead cat bouncing. The slow momentum numbers are very unfavorable for gold and silver so be careful.
Now check out our Top 25 Lists and TradeWinds Black Box results.
Sunday, May 4, 2008
TradeWinds for May 2nd
Last week was a good week indeed, which solidified the on going rally and puts behinds us all the talk of bear markets. Not only are momentum indexes looking good (still a touch over bought), but I did some review of the longer term - weekly, monthly - momentum indexes and found some very favorable information.
We use the weekly and monthly momentum as part of our scoring algorithm which feeds into our Top 25 rankings. For several weeks now the weekly momentum has turned to the long side virtually across the board of the major indexes. At the conclusion of this past week, we now have the monthly momentum also turning to the long side. The monthly charts are very slow moving and they very rarely whipsaw. When they turn, you can count on them continuing in the direction they are pointing. You can now trade with much confidence to the long side. You should watch our momentum charts closely for those short term over bought adjustments or dips and plan your trades accordingly.
Looking at sectors, technology is taking over the leadership role. In ranking the top indexes and sector ETFs using our scoring system - techs take two of the top five spots. The top 5 are - QQQQ, USO, DIA, MDY and XLK. Oil and four broad based indexes are the leaders. Don't doubt the breadth of this rally.
Now check out the Top 25 lists and TradeWinds Black Box for some trading ideas.
We use the weekly and monthly momentum as part of our scoring algorithm which feeds into our Top 25 rankings. For several weeks now the weekly momentum has turned to the long side virtually across the board of the major indexes. At the conclusion of this past week, we now have the monthly momentum also turning to the long side. The monthly charts are very slow moving and they very rarely whipsaw. When they turn, you can count on them continuing in the direction they are pointing. You can now trade with much confidence to the long side. You should watch our momentum charts closely for those short term over bought adjustments or dips and plan your trades accordingly.
Looking at sectors, technology is taking over the leadership role. In ranking the top indexes and sector ETFs using our scoring system - techs take two of the top five spots. The top 5 are - QQQQ, USO, DIA, MDY and XLK. Oil and four broad based indexes are the leaders. Don't doubt the breadth of this rally.
Now check out the Top 25 lists and TradeWinds Black Box for some trading ideas.
Thursday, May 1, 2008
TradeWinds for May 1st
Nice rally today, although it still leaves me a bit concerned for a short term correction.
Looking at our momentum indicators, our fast momentum has bottomed and turned up sharply, which is always a good sign. That coupled with the fact that our slow or long term momentum is just cruising along in positive TradeWinds territory is doubly good. We are still concerned that the moderate momentum never dipped much to reload, but that can happen when there is a real strong bull move and then all the indicators reload at the same time. We will see how this plays out.
The move continues to be pretty broad based with the exception of precious metals and other sectors that are influenced by the strength of the dollar. In other words the dollar is looking poised to get stronger therefore oil, euros and other currencies will be under pressure. The healthcare sectors are coming to life so keep an eye on them since they have been down for the longest. Agriculture also has a question mark as to whether it will get back in its groove or not.
Check out our Top 25 lists and TradeWinds Black Box results.
Looking at our momentum indicators, our fast momentum has bottomed and turned up sharply, which is always a good sign. That coupled with the fact that our slow or long term momentum is just cruising along in positive TradeWinds territory is doubly good. We are still concerned that the moderate momentum never dipped much to reload, but that can happen when there is a real strong bull move and then all the indicators reload at the same time. We will see how this plays out.
The move continues to be pretty broad based with the exception of precious metals and other sectors that are influenced by the strength of the dollar. In other words the dollar is looking poised to get stronger therefore oil, euros and other currencies will be under pressure. The healthcare sectors are coming to life so keep an eye on them since they have been down for the longest. Agriculture also has a question mark as to whether it will get back in its groove or not.
Check out our Top 25 lists and TradeWinds Black Box results.
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